Power of Attorney: Everything that Seniors Need to Know
It’s all too common that many families reach a point when they realize their elderly loved one does not have the physical or mental capacity to handle their legal and financial matters. This realization can be particularly stressful if your senior loved one struggles with dementia or some other form of cognitive decline. Having a power of attorney in place can make this moment less worrisome for your family. A power of attorney is a document that gives a designated person the authority to act on the behalf of a loved one when they are unable. Read more as we discuss the specifics of a power of attorney.
What is a Power of Attorney?
Each state will have different parameters, but overall, a power of attorney is a written document that allows financial, legal, and property matters to be handled by someone they trust. When this happens, the affected senior will become what is called the “principal,” and the caregiver or loved one will become the “attorney-in-fact” or “agent.”
Based on your loved one’s wishes, an agent can handle all their financial or legal concerns or make decisions about one or several issues. For example, if your loved one wanted to deem you with “health care power of attorney” rights, you would only be handling their medical decisions moving forward. However, your loved one can also write a power of attorney that can leave you solely responsible for their health, financials, and property details. Therefore, the senior and their agent should have a lawyer present when deciding these details so that everything is laid out clearly and explained thoroughly from the beginning.
According to the National Caregivers Library, once the power of attorney document is signed, the agent is then responsible for the record-keeping of any financial transactions on behalf of the principal. Your loved one and their agent can also speak with a lawyer during the signing about what kinds of financial, health, and legal decisions your elderly loved one can make for themselves further down the line. These can include:
- Guardian recommendations
- The consent to give, stop or withhold health care treatments
- Matters concerning their estate or property
- Financial issues or gifts of money as well as financial limits for said monetary issues.
When Should a Senior Consider a Power of Attorney?
Ideally, designating a power of attorney should be part of your loved one’s retirement planning. Establishing a power of attorney is a good idea for any retired person or senior at any time. And it’s important to understand that signing a power of attorney does not deprive you of control over your affairs. It is a contingency plan that becomes a powerful tool when needed.
Also, if your loved one has been diagnosed with dementia, it’s vital to begin legal planning immediately, and that includes finding a competent lawyer who understands the parameters of power of attorney in your state. The Alzheimer’s Association states that the sooner these meetings begin after the diagnosis, the more involved your loved one can be in their financial planning and future.
A few of the fundamental topics that you will need to discuss with an attorney include:
- Making plans for long-term health care coverage
- How the family will handle future finances and property matters
- Naming a power of attorney
Beginning the Process of Establishing Power of Attorney
Your aging loved one or parent may have difficulty letting go and relinquishing control over their personal finances and legal matters. As you begin to discuss their future or introduce the idea of a power of attorney, they may become emotional, frustrated, or even confrontational. They don’t want to lose their independence. According to Aging Care, their future cannot be sufficiently discussed in a single conversation. Instead, keep up open and ongoing discussions on the matter so that your loved one knows they are involved in their future and long-term legal planning. Explain this is a safety net that can ensure their wishes are met.
Establishing a power of attorney for a loved one with dementia is a process with more considerations. According to the Alzheimer’s Association, you will first need to determine what kind of legal capacity your loved one has. For example, if your parent or loved one can fully comprehend what a legal document is, they most likely can understand the logic behind these decisions and sign the papers on their own. Because there are varying degrees of mental capacity with Alzheimer’s and dementia, this can sometimes be difficult to ascertain. Yet in most cases, you should first find out whether your parent or loved one knows what is being signed and the consequences of doing so. If this process is still too difficult, talk to your loved one’s physician about what they think should be done when it comes to your loved one’s cognitive ability to handle legal matters.
Choosing the Right Lawyer to Set Up a Power of Attorney
Choosing a lawyer to guide your loved one or parent through the steps of setting up a power of attorney is crucial—especially for seniors newly diagnosed with dementia. The decisions, which you and your loved one make together, need subject matter expertise. Hiring just any lawyer might not be the best way to proceed. And the needs of someone with dementia or cognitive decline are unique and require experience in the field.
Fortunately, several organizations can steer you in the right direction during this selection process, including the National Academy of Elder Law Attorneys. These types of lawyers address several issues that pertain directly to a power of attorney and other legal matters that your family may face, including assisted living care, public and private finances (including Medicare, Medicaid, and veteran’s benefits) that will cover the cost of future health care, their right to quality care, estate planning, and future finances. If you already have a family lawyer, they can also direct you to an attorney specializing in elder law.
While it is true that you can complete certain legal documents about your loved one’s health and wellbeing on your own, getting advice from an expert in the field could be the best way to ensure that all these precise details are ironed out from the beginning.
What Are Some Common Misconceptions Associated with Power of Attorney?
If you are a caregiver for an elderly loved one, like many people, you may have some misconceptions about a power of attorney. Here are a few common misconceptions that we can help to sort out.
Myth: A durable power of attorney is the same as a standard power of attorney.
Fact: A power of attorney is a legal document that allows someone to act on your behalf. A power of attorney is typically limited to a specific matter. And it ends when the purpose is fulfilled—for example, giving a person the authority to sign documentation on your behalf to sell a home when you live out of the state. Whereas a durable power of attorney is put into place before your elderly loved one would need it. It gives someone the right to act on their behalf if they are incapacitated or unable to make a decision on their own.
Myth: There are strict qualifications for someone to be a power of attorney.
Fact: The power of attorney is anyone 18 years or older who can handle the responsibility of making important decisions for their loved one. A power of attorney is referred to as the “agent” and the senior is called the “principal” in the document. Often agents for a power of attorney are adult children, a spouse, relatives, or trusted friends. The U.S. judicial system does not manage, regulate, or monitor a power of attorney, so selecting someone trustworthy is important for your family to consider. And your loved one should work with a lawyer to include specific language regarding all matters they are handing over to the agent.
Myth: Nothing is stopping a power of attorney agent from doing whatever they want.
Fact: Signing a power of attorney does not mean the agent can do as they please. They have an overriding legal obligation, also called a fiduciary obligation, to make decisions in the principal’s best interest. Therefore, it is critical to select someone whom your loved one knows will fulfill their expressed wishes in the event they are unable to do so by themselves.
Myth: A power of attorney document is entirely binding.
Fact: In fact, there are some instances in which a power of attorney document can become voided or terminated, including:
- The death of the principal
- If the agent is unavailable
- A termination procedure that is strictly outlined in the original power of attorney document
Setting up a power of attorney can bring you and your parent valuable peace of mind, so don’t delay. If they want their financial or medical decisions to be fulfilled, then setting up a power of attorney who understands their wishes is essential. Their future should not be something left to chance, but a decision made while they are able to take part in the process.
Part of planning for your loved one’s future is finding a long-term care community that can support them if they can no longer live independently. Schedule a tour of a community near you to see if Aegis Living may be a fit. We are happy to answer all your questions, so your family can make an informed decision now and into the future.
How Seniors Can Avoid Tax Scams
There are three letters that can strike fear in our hearts – IRS, the Internal Revenue Service. If you were […]
What you need to know about veteran and spouse benefits
At Aegis Living, we deeply appreciate our veterans and their families. Over the past two decades, we have cared for […]